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“Someone’s sitting in the shade today because someone planted a tree a long time ago.”

— Warren Buffett

The Warren Buffett investment philosophy calls for a long-term investment horizon, where a two-decade holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Hartford Financial Services Group Inc. (NYSE: HIG)? Today, we examine the outcome of a two-decade investment into the stock back in 2004.

Start date: 05/21/2004


End date: 05/20/2024
Start price/share: $64.95
End price/share: $102.08
Starting shares: 153.96
Ending shares: 237.77
Dividends reinvested/share: $21.43
Total return: 142.71%
Average annual return: 4.53%
Starting investment: $10,000.00
Ending investment: $24,267.77

As we can see, the two-decade investment result worked out as follows, with an annualized rate of return of 4.53%. This would have turned a $10K investment made 20 years ago into $24,267.77 today (as of 05/20/2024). On a total return basis, that’s a result of 142.71% (something to think about: how might HIG shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Hartford Financial Services Group Inc. paid investors a total of $21.43/share in dividends over the 20 holding period, marking a second component of the total return beyond share price change alone. Much like watering a tree, reinvesting dividends can help an investment to grow over time — for the above calculations we assume dividend reinvestment (and for this exercise the closing price on ex-date is used for the reinvestment of a given dividend).

Based upon the most recent annualized dividend rate of 1.88/share, we calculate that HIG has a current yield of approximately 1.84%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.88 against the original $64.95/share purchase price. This works out to a yield on cost of 2.83%.

One more piece of investment wisdom to leave you with:
“Cash combined with courage in a time of crisis is priceless.” — Warren Buffett